PlanMagic Business 10.0

Notes to financials

Notes to the financial statements

Investors and bank managers often require that you include the notes to the financial statements with your business plan. We have provided a worksheet with a summary of the structure of the business plan, with the most relevant notes, calculations and assumptions. Most of the numbers are automatically filled from the assumptions and the respective worksheets.

This is an open worksheet, you can add or edit additional information as is needed. Items shown here in RED are automated.

General
Projection time horizon	5 years
Basis	3 years monthly and quarterly, 5 years annual summarized.
...	...

Balance sheet
Cash/Bank	Cash balance is derived from the end balance of the same month/year of the cash flow forecast.
Debtors/Accounts receivable	Accounts receivable balances are derived by utilizing an estimated 60% sales on credit and 30 days collection on sales.
Stock/Inventory	Based on the minimum stock level of each product line (see inventory account sheet for details). The beginning inventory not sold in any particular period is carried forward accordingly.
Other current assets	It includes notes receivable, investments, marketable securities (f.e. government bonds and notes, commercial paper, and/or stock and bond investments in public corporation).
Fixed assets	Includes the original book value of the assets. (see the depreciable assets 5 year summary for depreciation details for each fixed asset type)
Depreciation	Depreciation is provided for physical properties on a straight line basis over the estimated useful life of the property as follows: Buildings = 40 years, Office equipment = 5 years, Computer hardware / software = 3 years, Furniture & Fixtures = 5 years, Machinery/Plant = 10 years, Vehicles = 8 years.
Goodwill	Goodwill includes ...
Creditors/Accounts payable	Estimated by utilizing 30 days payable and the expense items not paid in cash. It also includes any unpaid accumulated interest from deferred loans.
Suppliers' credit	Derived by utilizing 80% purchases on credit and 60 days payable.
Sales tax	Sales tax payable as calculated in the sales tax account.
Income tax	The company income tax payable.
Shareholders' capital	Consists of the initial shareholders' investment of 75,000 US$ plus an additional stock sale of 237,500 US$ over 5 years as entered in the funding worksheet.
Retained earnings	Previous year's net earnings (net profit) not paid out as dividends.
Provisions	...
Contingent liabilities	...
Contingent assets	...

Cash flow
Cash sales	Estimated 40% cash sales.
Collections from debtors	Derived by utilizing 30 days collection on sales and an estimated 60% sales on credit.
Sales tax in	Total incoming sales tax as calculated in the sales tax account.
Other cash receipts	...
Cash purchases	Estimated 20% cash purchases.
Suppliers payment	Derived by utilizing 80% purchases on credit and 60 days payable.
Other cost of goods	Includes any sales commissions, packaging, and shipping.
Operating expenses	Includes the expense items paid in cash and the creditors payments (with 30 days payable).
Franchise fees	A 10% fee on gross profit.
Short/Long term loans repayment	Principal repayments, excluding interest.
Change in other current assets	Adjustments of other current assets (increase/decrease) in the balance sheet for any particular period.
Sales tax payment	Paid on a bimonthly basis. A negative amount is a refund.
Dividends	25% of the net earnings paid on a quarterly basis.